Managing Human Resources
Chapter 7
Learning Objectives
LO 1 Discuss how companies use human resources
management to gain competitive advantage
LO 2 Give reasons why companies recruit both
internally and externally for new hires
LO 3 Identify various methods for selecting new
employees
LO 4 Evaluate the importance of spending on training
and development
7-2
Learning Objectives (cont.)
LO 5 Explain alternatives for who appraises an
employee’s performance
LO 6 Describe the fundamental aspects of a reward
system
LO 7 Summarize how unions and labor laws influence
human resources management
7-3
Human Resource Management (HRM)
• Definition
• “People are our most important assets”
Creates
value
Is rare
Is difficult
to imitate
Nonsubstitutable
7-4
Strategic Human Resources
Management
• Human capital
– The knowledge, skills, and abilities (KSA) of
employees that have economic value
• Causal ambiguity
• Culture
7-5
HR Process
Recruitment
Planning
Selection
Evaluating
Training
Compensation
Performance Appraisal
Training
Overview
Company Strategy
(D) What do
we need?
(S) What do
we have?
D=S
D<S
D>S
Reconciling S and D
•S=D
–Skill mix
• Jobs and training
–No education, no job
•S>D
–Downsizing
•S<D
HR Process
Recruitment
Planning
Selection
Evaluating
Training
Compensation
Performance Appraisal
Training
Recruitment
• Definition
• Internal and external supplies
7-10
Numerous complications
• Globalization
– “Relevant labor market”
• Customer emphasis
– “we forgot the customer”
– Ala “the web!”
•
•
•
•
Endless technological advancement
Faster pace of work
“Knowledge workers”
Worldwide labor shortage
THINK – Internal
• Why?
– Good PR
– Builds morale
– Encourages ambition
– A lot is already known
– Less costly
– Training device
– Quicker
THINK – Internal
• Why not?
– Lose better qualified outsiders
– Old and stale
THINK – External
• Why?
– New blood
– New direction
– Lower training and development costs
#2: General Job Boards are Dying; Go Niche
#5: Get a Corporate Facebook Page
HR Process
Recruitment
Planning
Selection
Evaluating
Training
Compensation
Performance Appraisal
Training
KSA
Job
Requirements
•A
•B
•C
•D
•E
KSA
Job
Requirements
•A
•B
•C
•D
•E
Competencies
“Fit”
Competencies
“Fit”
Competencies
“Fit”
Competencies
“Fit”
“Fit”
Step 1: Preliminary Screening
• Application form
– To determine minimal qualifications
– To gather required EEO data
– Legally considered to be a “test”
– Huge red flags
• Inconsistencies
• Gaps
– Lies = fired
Step 1(A): Background Investigations and
Reference Checks
• Extent of investigations and checks
– Reference checks (87%)
– Background employment checks (69%)
– Criminal records (61%)
– Driving records (56%)
– Credit checks (35%)
• They can legally refuse to hire you!
Negligent hiring
• Definition
– “obligation to protect employees and clients”
• “knew or should have known”
• $1.5 million
Step 2: Interviewing
• Social factors
–Person - job
–Person - team
–Person – organization
Typos and Spellcheck
• “Seeking a job in public relations….”
• “Seeking a job in pubic relations….”
From Fortune Magazine
•
•
•
•
•
•
•
•
•
•
•
“Finished eighth in my class of ten.”
“Reason for leaving last job: maturity leave.”
“Failed bar exam with relatively high grades.”
“Am a perfectionist and rarely if if ever forget details.”
“It’s best for employers that I not work with people.”
“Let’s meet, so you can ‘ooh’ and ‘aah’ over my experience.”
“I have an excellent track record, although I am not a horse.”
“You will want me to be Head Honcho in no time.”
“I am completely paranoid, trusting no one and absolutely nothing.”
“Personal interests: donating blood. Fourteen gallons so far.”
“I am loyal to my employer at all costs..Please feel free to respond
to my resume on my office voice mail.”
• “Instrumental in ruining entire operation for a Midwest chain store.
Step 2: Types of Interviews
• Unstructured
– Most widely used selection procedure
– Notoriously bad
– Unplanned, informal, quick
– “hunches” or “pet questions”
• “tell me about yourself”
• “what kind of animal?”
• “where in 10 years?”
Step 2: Types of Interviews
• Structured
– Same ?’s for all
– (maybe) set response/scoring scale
– Detailed notes
Step 2: Types of Interviews
• Structured
– “what would you do if…….”
– “tell me about a time when…….”
Step 2: Types of Interviews
• Situational interview
– “what would you do if…….”
• Behavioral interview
– Back to the future
– Fudge and brownies
– Probing
– http://www.youtube.com/watch?v=v1ktCV1iMJE
Step 2: Types of Interviews
• Behavioral interview
– Desired experiences, knowledge, etc.
•
•
•
•
•
•
•
Critical thinking
Being a self-starter
Willingness to learn
Willingness to travel
Self-confidence
Teamwork
Professionalism
Step 3: Tests
•
•
•
•
Tests
Tests
Tests
And more tests……both “informal” and formal
Manners
Uggggggly ties……
Fit in a New World
• Person-job fit
– Job requirements
– Applicant traits
• Person-team fit
• Person-organization fit
Personality tests
• Problems:
– applicants may fake responses
– job relevance
– have not been shown to predict job performance
Personality Tests - Objective
• Big 5 Factors/Dimensions
– Introversion/extraversion
– Emotional stability/Neuroticism
– Agreeableness
– Openness to Experience/Intellect
Personality Tests
• Big 5 Factors/Dimensions
– Conscientiousness
• Disciplined
• Organized
• Ambitious
• Goal-oriented
Personality Tests - Objective
• Myers-Briggs
– Extraversion (E) / Introversion (I)
– Sensing (S) / iNtuition (N)
– Thinking (T) / Feeling (F)
– Judging (J) / Perception (P)
Integrity tests
• Predicts predisposition to counterproductive or
dishonest behavior
• Types:
– personality integrity tests
– overt integrity tests
Integrity Tests - Example
• Your next-door neighbor offers to hook you up with free cable
television. Do you take the offer?
• You’re a CEO with a chance to make $100 million by cooking the
books. The worst penalty you could face is two years in a country
club prison - and you could keep the $100 million. Do you cook the
books?
• You’re a minor league baseball player trying to make the majors.
Most of your teammates are taking steroids to hit better. Do you
also dope?
• You are a doctor. An HMO denies a certain treatment to a patient
under your care. Do you lie to the HMO to make the patient’s
condition seem worse so they will get the treatment they need?
Cognitive Ability Tests
• Measures
– Ability to learn quickly, logic, reasoning, reading
comprehension, etc.
– Mental abilities such as verbal or mathematical
Cognitive ability
• ACT/SAT
• GMAT
• Wonderlic Cognitive Ability Test
– WPT-R
Cognitive Ability Tests – The Good
• Valid inferences (e.g., performance, training)
– more complex jobs
• Not expensive
• No skilled administrators
• Can’t fake
Assessment Centers
• Interpersonal skills, communication skills,
planning and organizing, and analytical skills
– managerial and other white collar jobs
• Multiple trained raters
Assessment Centers
Validity of selection procedures
• Top Dogs (>.30)
– mental ability tests
– work samples
– weighted application
blanks
– highly structured
interviews
• Moderate (.15-29)
– Scored reference
checks
– Experience
• Fair-Poor (.10- .14)
– unstructured
interviews
– grades
– interests
– personality
– integrity tests
• Don’t bother (<.1)
–
–
–
–
Polygraphs
Graphology
Astrology
Age
Drug Tests
•
•
•
•
Urine**
Hair
Saliva
Blood
Drug Tests
• Five-Screen
– Marijuana, Hashish
– Cocaine, Crack
– Heroin, Opium, Codeine, Morphine
– Amphetamines, Meth, Speed
– PCP, Angel Dust
Drug Tests
• False positives
–
–
–
–
–
–
–
Ibuprofen (Advil, Motrin)
Midol
Nuprin
Sudafed
Vicks Nasal Spray
Neosynephren
Ephedra and Ephedrine-based products (often used in
diet products)
– Vicks 44
HR Process
Recruitment
Planning
Selection
Evaluating
Training
Performance
Appraisal
Compensation
Training
Uses
• Administrative
– “Paper trail”
– Can be excellent EEO defense
• Developmental
• Pay decisions
Types of Appraisals
Trait
Behavior
7-70
(Competencies)
Results
Pay and Performance
• Variety of ways
– Forced distribution
Pay and Performance
• Forced distribution
Pay and Performance
20-70-10 model
Now for your consideration….
• Who can evaluate the performance of
employees?
– Immediate supervisor
– Peers
– Subordinates
– Self
– Customers
360 Appraisal
HR Process
Recruitment
Planning
Selection
Evaluating
Training
Compensation
Performance Appraisal
Motivation
E-Learning
e-Learning
Caleb Phillips, Teacher of the new method of Short Hand
1728
e-Learning
• Simulations
Second Life
• http://secondlife.com/?lang=en-US
Success Stories
Case Study: Northrop Grumman
Employees can disable a real bomb by
safely learning how to do it virtually.
Ernst & Young
e-Learning
• Distance training/learning
• Simulations
• Blended learning
Blended Learning
HR Process
Recruitment
Planning
Selection
Evaluating
Training
Compensation
Performance Appraisal
Motivation
HR Process
Recruitment
Planning
Selection
Evaluating
Training
Compensation
Performance Appraisal
Motivation
Compensation
• Monetary rewards
– Direct compensation
– Indirect compensation
• Non-monetary rewards
– “touchy-feely” stuff
– Very important
3 types of fairness
• External equity
• Internal equity
• Individual equity
3 types of fairness
• External equity
– Definition
• Area wage surveys
– Lead, lag, or match
• Internal equity
• Individual equity
Area Wage
Survey
3 types of fairness
• External equity
• Internal equity
• Individual equity
– Merit pay
Merit Pay
HR Process
Recruitment
Planning
Selection
Evaluating
Training
Compensation
Performance Appraisal
Motivation
Evaluating HRM
• Employee level
– Absenteeism
– Turnover
• Voluntary
• Involuntary
– EEO violations
• Organizational level
– Productivity
– Product/service quality